Stimulus Check Update as One State Approves $500 Child Tax Credit

A new child tax credit program approved by lawmakers would send $500 payments to lower-income families in one state, as Americans battle a surge in living costs.

The plan is part of a record $50.6 billion budget that passed in the Democrat-controlled New Jersey state legislature and was sent to Democratic Gov. Phil Murphy's desk on Wednesday.

His office said he expected to sign it by the Thursday deadline, according to the Associated Press.

The legislation would create the New Jersey Child Tax Credit Program, giving a refundable $500 tax credit for each child under the age of six for families earning up to $30,000 a year.

The tax credit amount would be reduced by $10 for every $1,000 of taxable income that exceeds $30,000 until it reaches $80,000, with a minimum of $300 per child for a household earning up to $80,000 a year.

The program will have an estimated annual price tag of up to $156.3 million, according to analysis by the Office of Legislative Services.

Taxpayers can claim the tax credit for about 374,000 children under six in 2022, the analysis said. At least 180,700 children would be eligible for the full $500, while another 99,500 could get a credit of at least $300.

Another provision in the budget is a property tax credit for homeowners: some 870,000 families that make up to $150,000 would get "direct relief" of $1,500, while those earning from $150,000 to $250,000 will get $1,000 in credits.

It also includes a rebate for renters, with those making up to $150,000 a year getting $450 in assistance.

The budget's provision "will make the lives of the people of New Jersey more affordable with substantial property tax relief for homeowners and renters," Budget Committee Chairman Democratic Sen. Paul Sarlo said during a speech on the floor on Wednesday, the AP reported.

New Jersey Republicans have criticized the legislation because the child tax credit is not being offered for children over six and said it would not reach families until the 2024 tax season.

Meanwhile, Senate Democrats are reportedly closer to an agreement on a bill that would impose an "inflation rebate" policy on drug companies.

Prescription Drug Costs

Democrats plan to submit a "finalized" deal to lower prescription drug costs in the coming days, NBC News reported, citing an unnamed source familiar with the negotiations.

According to the outlet, provisions in the bill would allow Medicare to directly negotiate prescription drug prices to lower costs for consumers and cap out-of-pocket costs for Medicare patients at $2,000 a year.

It would also impose an "inflation rebate" policy on companies to make them pay back consumers if they raise prices above inflation, which has hit a 40-year high and fueled fears of a recession.

Child tax credit stock photo
A file photo of money and a child tax credit note. New Jersey lawmakers passed a record budget on Wednesday, including a new child tax credit for lower-income families. iStock